Benefits and Costs of Adding Additional Cardholders on Credit Cards

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There are a lot of great reasons to add an authorized user to your credit card

However, I thought it was time to take a look at this landscape as a whole and clearly define the pros and cons associated with adding cardholders. There are some great reasons to add a cardholder, but doing so should be undertaken with caution. The benefits can be a real advantage to those trying to maximize their points banking, but the corresponding fees and possible penalties should absolutely be factored in to your decision.

Here are the pros, cons, benefits and fees you’ll need to consider before you add a cardholder to your account:

PROS

Earning points for another person’s spend. Adding a cardholder to your credit card account means that you can bank the points they earn with their own spending. If you choose a card with transferable points like American Express or Chase, you can then transfer points to the additional cardholder’s frequent flyer/guest accounts.

An easier time hitting spend thresholds. Since the spend from additional cards go towards spend on the main account, you’ll have an easier time reaching the required spend levels to access valuable awards like the British Airways “Travel Together” companion ticket or the 10,000 EQM’s the Citi Executive AAdvantage World Mastercard gives you for spending $40,000 in a calendar year.

A credit-challenged spouse/partner will have access to credit and points. If a spouse or partner isn’t credit worthy enough to apply for their own card, making them an additional cardholder allows them a chance to rebuild their credit and simultaneously earn points. Likewise, adding a child as an additional cardholder can be a great way to build up their credit history and therefore their credit score so that when they want to apply for their own credit cards, they have a better chance.

If an additional cardholder is credit worthy, they could still get their own card. Being an additional cardholder doesn’t preclude someone from applying for their own card (the same one they’re an additional cardholder on) and banking their own sign-up bonuses.

Two cards, four potential bonuses. If you’re part of a couple, remember that you can each get your own separate cards for two larger bonuses (providing you can each meet the spend threshold), then add each other as authorized users for additional point bonuses when those exist.

Adding an authorized user can help them build their credit history and thus boost their credit score over time

CONS

Fees. Before adding a cardholder, I always recommend looking carefully at the exclusions in the Terms and Conditions of the card’s application page. In general, adding authorized users is free, but some cards charge annual fees to add cardholders (like the $175 charged by Platinum American Express card – see below), some of which can weigh against the advantage of points bonuses.

It’s your credit on the line. If an additional cardholder neglects to pay their bills, you’re responsible for their spending – so be sure you familiarize yourself with the spending and bill-paying history of the person you’re adding. This can be especially challenging with charge cards like the Chase Ink Bold that need to be paid off in full every month. Don’t be afraid to ask to see a potential cardholder’s account statements – reversing a bad credit history will be much harder than starting this conversation.

Specific Fees and Benefits

Individual cards charge specific fees for adding cardholders, but many also offer special benefits. Here are the fees and benefits of some of the most popular points-earning credit cards on the market right now.

Know what you’re getting into when you add an authorized user

American Express

Premier Rewards Gold: There is no annual fee for up to 5 additional cards. The annual fee for 6 or more additional cards is $35 for each card. No extra benefits, but having additional cardholders can help hit the $30,000 calendar year spend threshold (and thus earn 15,000 bonus points) faster.

Business Gold Rewards: Introductory annual fee of $0 for the first year; then $50 for the first Business Gold Rewards Card and no fee for the rest. No additional benefits, but same benefits as primary cardholder with OPEN discounts.

Platinum: $175 for up to three additional cards then $175 per card after that. Additional cardholders get Airport Club, Airspace Lounge, Priority Pass and Centurion Lounge access, a $100 credit for Global Entry/TSA Pre-Check (when the $100 application fee is charged on the additional card) and SPG Gold status, but the calendar year $200 airline rebate is take from charges off all the cards in the same account, so individual authorized users do not get their own airline rebate.

Business Platinum: $300 fee for each additional Business Platinum card. Additional cardholders get Airport Club, Airspace Lounge, Priority Pass and Centurion Lounge access, a $100 credit for Global Entry/TSA Pre-Check (when the $100 application fee is charged on the additional card), SPG Gold status and OPEN savings and discounts. But the calendar year $200 airline rebate is take from charges off all the cards in the same account, so individual authorized users do not get their own airline rebate.

Delta Reserve: $175 per additional card, and no limit to the number of additional cards that can be requested. Additional cardholders have access to Delta SkyClub Lounges and 24/7 concierge services, but in order to receive a baggage fee waiver and priority boarding, they must be traveling with the primary card member. On or after May 1, 2014, the Delta Reserve Card Member will have complimentary access and be allowed up to two guests per visit at a discounted rate of $29 per guest and any additional guests at the standard rate

Sapphire: $0, and new applicants get a 2,500-point bonus when they add an authorized user within 3 months and make a purchase.

Freedom: $0, some offers include $25 cash back for adding an authorized user and making a purchase within 3 months. $1,500 cap on quarterly 5% cash back bonus applies to all cards on the same account.

Business Cards

Ink Bold: $0 and authorized users have reported getting their own annual lounge passes and Lounge Club membership.

Ink Plus: $0 and authorized users have reported getting their own annual passes and Lounge Club membership.

Airline Cards

British Airways Visa: $0, no additional benefits, but a good way to get extra spending to earn the “Travel Together” Companion Ticket.

United MileagePlus Explorer: $0 for additional cards, 5,000 bonus miles when you add an authorized user within 3 months and make a purchase. Card benefits like free first checked bag, priority boarding and 2 annual United Club passes apply only to primary cardholder and companion on same reservation.

United Club Card: $0, but only primary cardholder and travel companions get United Club access, free first and second checked bag, Premier Access, close-in booking fee waiver, any seat any time award availability, Hyatt Platinum status, Avis First membership, etc.

Marriott Premier Visa: $0, no additional benefits, though the spending can help earn 1 elite credit per $3,000 spent.

Ritz-Carlton Card: $0 for additional cardholders. Authorized users are eligible for their own Lounge Club membership, Gold Elite status only for primary cardholder, as is $200 annual airline reimbursement (all users on the account draw from same rebate cap). Three annual Club Level upgrades is total for primary cardholder and authorized users.

Citi Executive AAdvantage World Mastercard: $0, no additional benefits and only primary cardholder and travel companions gets Admirals Club membership and earns up to 10,000 EQM’s when you make $40,000+ in purchases in a calendar year (but having an authorized user can help you hit that threshold faster), as well as other benefits like first checked bag free and enhanced airport experience.

Citi Hilton HHonors Reserve: $0, no additional benefits – all the perks like automatic Gold status and Diamond status if you hit $40,000 calendar spend go to the primary cardholder, but having an extra user can help you rack up the purchases faster.

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